Post Termination Restrictions PTR's

[Unwell Cat]

Anybody know anything about these? I've been sent a contract by a potential employee and it has the following clause -

The parties agree that during his employment the Employee is likely to obtain knowledge of the Company?s trade secrets and other confidential information and that it is fair and reasonable for the Company to protect its interests by the following provisions set out in this Clause 27. ?Company? in this clause shall include ?Associated Company?.

In this clause the following definitions shall have the following meanings:
?Restricted Business? means the business of the Company at the time of the Termination Date;

?Restricted Customer? means any firm, company or other person who, during the period of twelve months ending on the Termination Date was a customer of or in the habit of dealing with the Company and with whom the Employee had material contact during the 12 months ending on the Termination Date of the Employee;

?Restricted Employee? means any person who at the Termination Date was an employee of the Company and who could materially damage the interests of the Company if he became employed in any business concern in competition with the Restricted Business and with whom the Employee had material contact in the 6 months prior to the Termination Date. This shall include a director, senior employee or creative person;

?Restricted Product ? and ?Restricted Service? shall mean a product or service of a customer of the Company which at the Termination Date is a product or service of a customer for which the Company has provided work or services of any material kind (whether for money or otherwise) in the 12 months before the relevant Termination Date;
?Termination Date? means the date of termination of the employment of the Employee;
?Associated Company? shall include any subsidiary of the Company or any subsidiary of a holding company of the Company. ?Subsidiary? and ?Holding Company? shall have the same definitions as in s736 of the Companies Act 1985;

The Employee covenants with the Company that he will not for a period of 12 months after his Termination Date:

(a)solicit or endeavour to entice away from the Company the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with the Restricted Business in respect of a Restricted Product or Service if the Employee has worked on that Restricted Product or Service in the 12 months before his Termination Date;

(b)provide goods or services to or otherwise have any business dealings with any Restricted Customer in the course of any business concern which is in competition with the Restricted Business in respect of a Restricted Product or Service if the Employee has worked on that Restricted Product or Service in the 12 months before the Termination Date;

(c)offer employment to or otherwise endeavour to entice away from the Company any Restricted Employee.

The obligations imposed by this clause 27 extend to the Employee acting not only on his own account but also on behalf of or together with any other firm, company or other person and shall apply whether he acts directly or indirectly.

Each of the restrictions set out above constitutes an entirely separate severable and independent covenant on the Employee. If at any time a court of competent jurisdiction decides that any part of any restriction goes beyond what is fair and reasonable in all the circumstances for the protection of the Company but that the restriction would be fair and reasonable if any part or parts of the wording were deleted, the restriction shall apply with such words deleted.

[abigsmurf]

They're of questionable legality as they conflict with your legal right to seek alternative employment. It would however make it to court and you'd incur expensive legal fees.

[Unwell Cat]

They're of questionable legality as they conflict with your legal right to seek alternative employment. It would however make it to court and you'd incur expensive legal fees.

That's roughly what I thought. Apparently the restriction is for 12 months should I leave employment with them. Are these quite common then?

[HaHaUK]

That's roughly what I thought. Apparently the restriction is for 12 months should I leave employment with them. Are these quite common then?

Quite common where employees have access to sensitive information, but theyre usally less than 12 months unless youre a very senior employee.

[Unwell Cat]

Quite common where employees have access to sensitive information, but theyre usally less than 12 months unless youre a very senior employee.

IT Manager?

[HaHaUK]

IT Manager?

I dunno what a IT manager does, but I assume that you have access to their client lists or something? If the companies clients are long-term then a 12 month RC may be reasonable.

Restrictive covenants usually prevent employees from working for the competition, but it seems that youre one only restricts you from stealing their customers and employees, so youre one seems to be a little less restrictive.

And just as a point of note, if your employer wrongfully dismisses you or breaches the employment contract, then the restrictive covenant is void.

[ChrisF]

Very common, and are incredibly un-enforceable. Loads of people leave my wife's company and go to work for their various customers and competitors, and each time the company makes legal threats and they never get anywhere.

One guy left his role as IT Director there to go work as IT Director at a direct competitor. No action was taken, although obviously as HaHa says, you'd have access to business confidential information, upcoming strategy etc... His contract would have clearly said (as my wife's does, and as did mine when I worked there) that you can't work for competitors.

[Dazzyman]

Basically its just company policy and not enforcable in law. You just have to read the last paragraph to see that anyway.

"Each of the restrictions set out above constitutes an entirely separate severable and independent covenant on the Employee. If at any time a court of competent jurisdiction decides that any part of any restriction goes beyond what is fair and reasonable in all the circumstances for the protection of the Company but that the restriction would be fair and reasonable if any part or parts of the wording were deleted, the restriction shall apply with such words deleted."